Paul Polman said that Europe must undergo an “enormous” deleveraging process and that its social security bill “doesn’t add up any more”.

The company’s like-for-like sales grew by just 0.8pc in Europe in 2012 as it battled a “fragile state of consumer confidence and intensely competitive markets”.

However, the Anglo-Dutch company said group like-for-like sales surged by 6.9pc thanks to a 10.6pc rise in emerging markets, where demand is increasing for personal care products such as Dove soap and Tresemmé hair products.

“China has lifted 600m people out of poverty,” said Mr Polman. “The first thing they do is buy our products.”

Unilever reported a 10pc rise in sales of personal care products, compared to 1.8pc for food, which is focused on developed markets such as Europe.

However, some food brands grew sales sharply, including Magnum ice cream, which is an “affordable luxury” according to Mr Polman. Magnum has now become one of Unilever’s €1bn (£840m) brands after it expanded into the US and Asia.

Unilever said total sales rose to €51.3bn and pre-tax profits increased 7pc to €6.7bn. The results drove Unilever shares up 78p to a record of £25.29.